LMP Provides Year End Shareholder Update

Rhea-AI Summary

LMP Automotive Holdings (NASDAQ: LMPX) provided a Year End Shareholder Update, reporting record revenues and income for 2021. The company completed an acquisition of a Chrysler Dodge Jeep Ram franchise, enhancing earnings. With 15 vehicle franchises and annualized revenue exceeding $600 million, LMPX is strategically poised for growth amid a rebalancing automotive market. The firm plans to pay down $11 million in debt and aims to triple its revenue through new acquisitions in 2022, focusing on larger dealer groups while maintaining operational discipline.

Positive

• Achieved record revenue and income in 2021.
• Completed acquisition of Chrysler Dodge Jeep Ram, expected to be accretive to earnings.
• Annualized revenue now exceeds $600 million from existing operations.
• Plans to triple revenue by adding 57 franchises and 6 pre-owned stores.
• Debt reduction plans of approximately $11 million in Q4 2021.

Negative

• None.

FORT LAUDERDALE, FL , Dec. 28, 2021 (GLOBE NEWSWIRE) -- LMP Automotive Holdings, Inc. (NASDAQ: LMPX), an e-commerce and facilities-based automotive retailer in the United States, today provided its Year End Shareholder Update.

Sam Tawfik, LMP’s Chief Executive Officer, stated, “As I look back on the year, it is remarkable how much we have accomplished given the current environment, not only in terms of financial performance but also in our steadfast focus, dedication and discipline. 2021 is shaping up to be a strong year for LMP, with the firm generating record revenue and income, as well as numerous other records in each of our lines of business, all while maintaining credit discipline and strengthening our balance sheet on a quarterly basis. We completed the acquisition of our contracted White Plains, New York Chrysler Dodge Jeep Ram in the early fourth quarter using approximately $5 million in cash from the company’s balance sheet, 55,000 shares of common stock and $1.3 million in cash from our existing credit facility. This acquisition will be immediately accretive to earnings in the fourth quarter of this year. As a result of this year’s acquisition activity, the company currently owns 15 new vehicle franchises, operates 4 pre-owned stores across 12 rooftops in 4 states which generate over $600 million in annualized revenue.

Macro and industry-specific dynamics have created an unprecedented backdrop for consolidation in the highly fragmented automotive retail sector. The expected medium-term rebalancing of vehicle supply and demand provides substantial visibility to dealer profitability, from both higher per-vehicle gross margins and rebounding unit volumes from pent-up demand. Additionally, high-margin parts and service revenues are benefiting from growing vehicle miles driven after a pandemic-related lull and strong economic growth.

Our strategy is to build operational density in attractive markets by partnering with existing operators of profitable dealerships. We use a prudent mix of cash, stock and rollover acquisition consideration to align interests with our partner operators. We believe this approach to M&A is a low-risk, scalable platform model that offers sellers a unique value proposition and captures the upside of scale at both the corporate and regional operational levels. Our acquisition pipeline continues to build, and our focus has shifted to acquiring larger
dealer groups, as larger deals require a similar effort to diligence and close as smaller deals. However, we remain opportunistic in acquiring select domestic and economy import brands in our targeted regions.

As part of our strategy realignment, we sold certain assets related to our leasing and subscription non-core business during the course of the year. We believe deploying that capital in our dealerships will yield higher returns.

Our dealerships generate substantial operating cash flow, which we will use to prudently manage liquidity and our leverage. We intend to pay down our existing term debt by approximately $11 million in the fourth quarter of 2021, resulting in a balance of approximately $85 million, of which the company allocates $53 million to its real-estate holdings and $32 million to its dealership blue sky purchase debt. Essentially at the current pace of cashflow generation, if we choose, the company can extinguish its current blue sky debt in less than a year.

During the course of the year our company has signed purchase agreements with 8 targets that will grow the platform to 57 franchises and 6 pre-owned stores across 36 rooftops in 6 states, which will more than triple the revenue of the company. These acquisitions will add density within our existing dealership footprint and expand into new highly attractive geographies.

We have engaged Bank of America to assist us in placing debt to refinance our existing credit facilities. We believe our new credit facilities, if and when closed, will provide the capital to fund the acquisitions for which we have signed purchase agreements, as well as flexibility to accommodate future growth.

As part of our acquisition strategy, we require an accounting firm to audit each of our targets in accordance with the rules and regulations promulgated by the SEC, and on occasion provide interim reviewed financials each of our targets. We file our target’s financials and pro forma financial statements of LMP according to SEC reporting requirements. The requirement for our targets to have audited financials can extend the time between signing a purchase agreement and closing, but is a critical component of our financial policy, particularly with the pace of our growth.

Our goal is to become a leading automotive retailer in the United States, and we have full confidence in our plan to execute our growth strategy. Our focus during 2021 was building the foundation of a high performing dealership platform and demonstrating a track record of success. Our priorities for 2022 will be closing the acquisitions under contract, integrating our acquisitions and selectively adding to our portfolio of dealerships to generate the highest possible risk adjusted returns.

Ultimately, the basis of our success is our people. They are the ones who serve our customers and communities, build the technology, and make the strategic decisions. Whatever your view is of the world’s complexity and the risks and opportunities ahead, having a great team of people — with necessary capabilities who can navigate challenging circumstances while dedicating themselves to professional excellence — is what ensures our prosperity, now and in the future. Lastly, I want to thank all our LMP shareholders, stakeholder partners, employees, outside professionals, suppliers and creditors for their continued effort and support.”

FORWARD-LOOKING STATEMENTS:
This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Such statements include, but are not limited to, any statements relating to our expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar matters that are not historical facts. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “project,” “projection,” “seek,” “can,” “could,” “may,” “should,” “would,” will,” the negatives thereof and other words and terms of similar meanings. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition, and stock value. Factors that could cause actual results to differ materially from those currently anticipated include: our dependence upon external sources for the financing of our operations; our ability to effectively executive our business plan; our ability to maintain and grow our reputation and to achieve and maintain the market acceptance of our services and platform; our ability to manage the growth of our operations over time; our ability to maintain adequate protection of our intellectual property and to avoid violation of the intellectual property rights of others; our ability to maintain relationships with existing customers and automobile suppliers, and develop relationships; and our ability to compete and succeed in a highly competitive and evolving industry; as well as other risks described in our SEC filings. There is no assurance that any forward-looking statements will materialize. You are cautioned not to place undue reliance on forward-looking statements, which reflect expectations only as of this date. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations or any changes in events, conditions, or circumstances on which any such statement is based, except as required by law.

FAQ

What were LMPX's financial highlights for 2021?

LMP Automotive Holdings achieved record revenue and income in 2021, with total annualized revenue exceeding $600 million.

What acquisition did LMPX complete recently?

LMPX completed the acquisition of a Chrysler Dodge Jeep Ram franchise, using $5 million in cash and stock.

How does LMPX plan to grow in 2022?

LMPX aims to close several acquisitions under contract, which will triple its revenue and expand its dealership footprint.

What is LMPX's strategy for managing debt?

LMPX plans to pay down approximately $11 million of its existing term debt in Q4 2021.

How many franchises does LMPX currently operate?

LMPX operates 15 vehicle franchises and 4 pre-owned stores across 12 rooftops in 4 states.